Organic Crop Budgeting Tool

Introduction

Montana State University’s Central Agricultural Research Center is always striving
to serve agricultural producers in our region through research projects, addressing
problems and impacts of agricultural production, and by disseminating knowledge to
our producers through our publications, teaching, and outreach. Often we work with
Montana’s agricultural producers on specific research projects.

The Central Agricultural Research Center has developed an organic crop budgeting tool
for up to six organic grains in Montana. According to the USDA NASS 2014 Organic
Survey, “Montana has the second most organic acres in the country”, and yet, there
is little research available on Montana organic grains. The purpose of this work
is to discover the potential profitability of growing organic grains in Montana.
Ultimately, an organic crop budget could be used to help organic producers make growing
decisions and provide transition farmers with useful information when contemplating
whether to switch from conventional to organic production.

Our goal is to provide an accurate, user-friendly tool to show potential profitability
of organic crops in Montana. The crops in the budget are typical organic crops grown
in Montana and are intended to be adjusted by individual operators as a guide for
their management decisions.

Budgets

Our budgets are divided into a cash flow section and individual crops grown. Individuals
can adjust any numbers highlighted in green to represent their operation. The numbers
in black are then calculated based on the market yield, market prices, and costs involved
in the operation.

Machinery

Since machinery varies widely among operations, the producer can enter their cost
of machinery (per acre) owned or hired by custom harvesters.

Certification

Organic certification costs also vary depending on the operation’s gross sales and
the certification program utilized.

Prices

Using conventional market prices in transition years, operators can estimate what
they would receive for their crops. The USDA AMS Organic Reports provide market prices
for organic grains. Local millers can also provide accurate market prices for the
region in which the farm is located.

Seed and crop rotations

Producers can and often use their own seed for planting small grain crops in Montana.
Certified organic seed is required unless it isn’t available in which case conventional
untreated seed can be used. Crop rotations are very important for managing pests,
soil moisture, and soil nutrients. Crop rotations should be used except in the case
of alfalfa where stands are typically maintained for four years.

Contracts

Marketing for organic grains is important to ensure good prices. A Montana producer
can use a contracted price to secure a price per bushel.

Limitations

Farm operation sizes vary widely in Montana and there is no typical-sized operation.
Crop rotations vary as well but typically include a small-grain crop, pulse crop, and
green fallow. This budget should be used as a tool to help identify potential profitability
in growing organic crops in Montana.